Radiohead – Pay What You Want

When the British band Radiohead Radiohead proudly announced it had dropped its record label, EMI, it seemed to mark the beginning of something very different within the recording industry. Later in October, reinforcing that a change was forthcoming, the band announced that a new album would be available only on their website for downloading (no iTunes and no physical CD).

However, the biggest surprise was yet to come.

On October 10, fans of Radiohead, anxious to download their latest CD (In Rainbows) online, were struck by an interesting posting when they went to “checkout”. In the box where one would normally see the standard music pricing was a single question mark. Clicking on the question mark led to a screen that read, “It’s up to you.” Clicking on that led to another message: “No, really. It’s up to you.” Customers were invited to pay whatever they wished – and nothing appeared just as acceptable as something.

Bob Lefsetz, American music industry critic and consultant to major record labels talks about the importance of Radiohead’s actions:

“It’s not like Radiohead’s living in a different world. But they’re playing by a different rulebook. One that says the money flows from the music, that people have to believe in you, that you’ve got to treat them right.

So what were the results of Radiohead’s “let the purchaser decide” approach? How did shoppers respond? Did their fans treat Radiohead right and reciprocate on their honest gesture?

With an estimated 1.2 million downloads during the first two days – 62% opted to pay absolutely nothing.

All of which may have prompted the bands next surprise. In December the band ceased allowing online downloads of the CD on their site and alerted fans they could now purchase the album through iTunes.